Procurement Notices

Papua New Guinea (PNG) has one of the most significant areas of largely-intact tropical forest in the world, although these forests appear to be facing acute and imminent threats. The Papua New Guinea Forest Authority (PNGFA) estimates that approximately 60% of the total area of the country is covered by natural forests, of which 52% are considered production forests (for timber and other products), and 48% are for conservation (not for timber extraction due to inaccessibility or ecological constraints).

Approximately 15 per cent of global greenhouse gas emissions are caused by land-use change and, in particular, the destruction of tropical forests. In 2001 it was estimated that PNG was responsible for between 2 and 7 per cent of global tropical emissions. Reducing land-use change and forest degradation is a likely cost effective way of slowing carbon emissions compared to other mitigation strategies, such as curbing emissions from power stations.

 

Since 2005, Papua New Guinea has been at the forefront of putting on the international agenda the issue of compensating countries for reducing their emissions from deforestation and forest degradation (REDD+) through international carbon financing mechanisms.

 

The recognition of the potential cost-effectiveness of REDD+ in reducing emissions led to its inclusion in the Bali Action Plan agreed at the COP 13 in 2007. The global community at COP 15 in 2009 further reiterated the intent to support a REDD+ mechanism and agreed “on the need to provide positive incentives to such actions through the immediate establishment of a mechanism including REDD+, to enable the mobilization of financial resources from developed countries”.

 

Consequently, the governments of many industrialized countries are announcing significant new funds to support REDD+ mechanisms. Much of the global effort to date has been channeled into creating high-level partnerships to administer large funds for REDD+ over a short timeframe.

While considerable effort at the international level on REDD+ financing mechanisms has been made, work is now emerging on general principles for the establishment of national transparent and equitable Benefit Sharing and Distribution Systems (BSDS).

 

Forest communities have always depended on the multiple benefits their ecosystem provided, treating their natural ecosystem with care and based on sustainable use. Environmental services therefore are not new. Payment for Environmental Services (PES) is, being a relatively new approach to reward traditional forest communities for maintaining and improving forested land, as the benefits encompass the local environment and transverses into global benefits, i.e. abating adverse trends in climate change. REDD+ should be regarded as a –well advanced and potentially promising- form of PES, with the difference to commonly known PES systems that the purchasers are international, and revenues will be received by the government.

 

Unfortunately, the independent verbs payment and benefit are often used in the same manner, which can contribute to confusion. Benefits to local stakeholders from their contribution to reducing emissions from forests may come in many forms. Payments of cash are likely not to be a significant component of the benefits received, at least early in REDD+ implementation.

 

REDD+ as one type of PES will stand a good chance to be effective if cooperation across the sectors can be achieved. A good dialogue involving multi-stakeholders at the national and sub-national level is indispensable for the process. Communities themselves need to be encouraged to remain committed to overall conservation. Main emphasis will be on the multiple services forests offer to these communities, supported by adequate and sustainable land use and natural resource planning.

 

Another challenge to implementing an effective BSDS is the complicated land-ownership matter in PNG. This rather unique situation has some 97% of the land under customary land ownership. Land is in hands of the many clans of Papua New Guinea. However, dealing with the different landowners is a delicate and cumbersome matter, open for much misinterpretation and exploitation. Not all clans are landowning, as in one community landowning clans and non-landowning clans may be living beside one-another, while there is a complex system of land user rights by other clans. Furthermore, there may be huge differences in sizes of land owned between clans forming one community or under one tribe. This can lead to large differences in distribution of incentive payments.

 

Landowners in PNG are represented in different ways, each type with overlapping functions and varying degrees of effectiveness and legitimacy: Traditional; Incorporated Land Group (ILG); Land Owner Companies (LOC); Village or Ward Development Committee (VDC); and Business Group or Public Company. All of these have their own benefits and their drawbacks. Given that both the ILG and LOC are legal entities to negotiate and enter into REDD+ agreements with the government or project developers, the issue of misrepresentation has significant bearing on the design and implementation of, specifically, benefit sharing mechanisms.

 

Evidently, landownership will directly impact the design of the benefit distribution system. To address the need for designing a national BSDS, in April 2013 the Government of PNG, through its Office for Climate Change and Development, signed a Memorandum of Understanding with FORCERT, a local not-for-profit service company, supporting village communities in their sustainable forest management. This NGO has  well-advanced in trialing PES in five pilot areas, and their practical experience is thought to be instrumental in designing a national REDD+ benefit sharing mechanism (BSM) framework. OCCD and FORCERT will be collaborating on including the main ideas and concepts of the Proposed PES system for PNG into the PNG Climate Change Policy and all relevant laws and regulations.

 

A key element in the approach of FORCERT in developing a transparent BSDS, is taking into account actual ownership of the land and the differences in sizes of land owned between the clans. They adopt a more general approach in pooling Environmental Services and organizing benefits that are based on agreements by participating communities on how benefits are to be shared for their specific situation, within a fixed BSM framework.

 

PNG is now developing a robust institutional framework to discuss, debate and enact action on REDD+. The Climate Compatible Development Strategy for Papua New Guinea (final draft released August 2010) clearly outlines the necessity to establish a fund disbursement mechanism and benefit-sharing models, while the Forestry and Climate Change Framework for Action 2009-2015 supports the development of a national fund with the responsibility of the GoPNG to “establish a transparent and well coordinated financial mechanism” and “disburse these funds appropriately to the recipients”. The draft Climate Change Policy (2012), which is currently under review to produce the final policy, in its draft version refers to the need for a transparent and equitable funds distribution mechanism at the local level, to compensate and incentivize local communities for potential livelihood changes.